Thursday, January 12, 2023

The Tyranny of the Churn Equation

David Smith (Mastodon):

As you can see there is an asymptotic point in this for many configurations where your revenue hits a ceiling that you can’t escape from. This level is the manifestation of the “weight” of your churning users growing over time.


I share this concept in the hopes that it will serve as an encouragement to other developers out there who are working on subscription apps and finding they are reaching a ceiling in revenue where they can’t seem to break free.


I will say that based on paying around with lots of configurations, improving your retention rate appears to be much more important to long term income than sign-up rate. Relatively small changes there can have huge cumulative impacts.

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